On Aug. 16, US Senate Committee on Foreign Relations chairman and Taiwan Caucus co-chair Senator Robert Menendez visited Taiwan. During his visit, Senator Menendez expressed support for negotiations on a bilateral trade agreement between the US and Taiwan as well as for Taiwan’s accession to the Trans-Pacific Partnership (TPP).
This is good news. Taiwan should not be afraid of signing free-trade agreements (FTAs) and it should be very interested in the transpacific economy. The partnership is a high-profile FTA, but a quick look at the countries that have or will become members makes it immediately clear that if Vietnam, New Zealand and Malaysia can make it, so can Taiwan. Furthermore, if Japan is not afraid of joining, there is no reason Taiwan should be.
Taiwan is a frontrunner in Asia for economic liberalization. In the 2010 Economic Freedom of the World index published by the US-based Cato Institute, Taiwan was ranked 15th of 144 surveyed countries, ahead of Japan at 20th and far ahead of South Korea. In addition, according to the Economist Intelligence Unit, Taiwan ranked 12th in terms of globalization in the same year, far ahead of Japan at 42nd and ahead of South Korea at 33rd.
The most complicated issue in trade liberalization for many countries is agriculture. Japan’s and Taiwan’s agricultural sectors are extremely similar as both consist of small-scale farming. So if Japan has announced its intent to join the TPP, why should Taiwan not do the same?
Taiwan can learn from Japan how to make the appropriate adjustments to its agricultural products and take advantage of being one of the countries in Asia with an advanced agricultural technology.
The biggest obstacle to Taiwan’s participation in the TPP is its government. The administration of President Ma Ying-jeou (馬英九) is only thinking about how to integrate Taiwan with China as quickly and as closely as possible to pave the way for irreversible unification. The government’s priorites are to implement the cross-strait service trade agreement, bring about a meeting between Ma and Chinese President Xi Jinping (習近平) and establish a free economic zone.
When Japanese Prime Minister Shinzo Abe took office, he immediately announced his intention to bring Japan into the TPP. However, Ma has said Taiwan will need eight years of preparation before it can take that step. The government is making the implementation of the service trade agreement with China and the establishment of a free economic zone preconditions for joining the partnership, saying that “the service trade agreement and the free economic pilot zone are preparations for future entry into the TPP.”
Ma’s talk about entry into the TPP eight years from now is clearly a ruse to deceive Taiwanese. The real goal is arranging a meeting with Xi and signing a “peace accord” that will bring about unification.
Taiwan can open up to the world and it can move closer to the international community; it must not become integrated with China. If it does, it will become part of a center-periphery economy in which the central economy, China, will attract the smaller peripheral economy, Taiwan. This would be beneficial to large corporations, but not to the public.
If the government and the public really want to raise salaries, create more employment and protect the nation, the public should look to Japan, listen to Menendez, do everything possible to join the TPP and forget about the service trade agreement. If Taiwan implements the service trade agreement, China will never agree to Taiwan joining the TPP.
Huang Tien-lin is a former adviser to the president and a former president and chairman of First Commercial Bank.
Translated by Perry Svensson